April 18, 2003

April 18, 2003

Contact Marci A. Alexander, Assistant Attorney General



            Maine Attorney General Steven Rowe today announced settlements in principle with Bayer and GlaxoSmithKline that will result in almost $2.5 million for the MaineCare program, formerly known as Maine Medicaid.  Maine joined many other state Medicaid programs in settling lawsuits that alleged illegal reporting of drug prices.  Federal law requires Medicaid programs to get prescription drugs for the lowest price available to any customer or “best price.”  The companies that settled earlier this week engaged in a so-called “lick and stick” scheme by relabeling or repackaging drugs under a private label, selling them at a deep discount to HMOs, and manipulating the best price provisions to deprive Medicaid programs of their lawful discount.  As a result, states paid millions more than they should have for the drugs.

Bayer pled guilty to a criminal charge and in a separate civil settlement must pay approximately $242 million to the state Medicaid programs ($1,524,563 of that to Maine) for violating federal law.  The Bayer drugs involved are Cipro, an antibiotic and Adalat CC, an anti-hypertensive.  

The allegations against GlaxoSmithKline, which must pay approximately $87 million to the state Medicaid programs ($961,057 of that to Maine), involved Flonase, a nasal spray, and Paxil, an anti-depressant. 

"These schemes shed some light on what is behind rising drug costs for states," said Assistant Attorney General Marci A. Alexander, who handled the case for the State with assistance from the MaineCare Surveillance and Utilization Review Unit.

Attorney General Rowe said, “We will continue to scrutinize every aspect of prescription drug pricing in order to make drugs more affordable for Maine people.”